TransCanada Corp. has won the contract to build, own and operate a US$320 million pipeline in Mexico that would deliver regasified liquefied natural gas (LNG) from a terminal now under construction, the Calgary-based company said Thursday.

The proposed Guadalajara Pipeline would follow a 310-kilometer (193-mile) route from an LNG terminal under construction near Manzanillo on Mexico's Pacific Coast to Guadalajara, the second largest city in Mexico. The 30-inch diameter pipeline would be capable of transporting 500 MMcf/d. The majority of the capital expenditures are expected to be made in 2010 with a targeted in-service date of March 2011. The project is supported by a 25-year contract for its entire capacity with Comision Federal de Electricidad (CFE), Mexico's state-owned electric company.

"The Guadalajara Pipeline project builds on TransCanada's excellent working relationship with CFE," said TransCanada CEO Hal Kvisle. "With Mexico's growing reliance on natural gas and TransCanada's proven success in building, owning and operating Mexican pipelines, the Guadalajara Pipeline offers an excellent opportunity for TransCanada to expand its footprint in Mexico."

The Guadalajara Pipeline would serve power generation load in Manzanillo and Guadalajara as well as connect to an existing Petroleos Mexicanos (Pemex) pipeline near Guadalajara. The source of natural gas will be the LNG terminal near Manzanillo, primarily supplied by Peruvian LNG. Last year a Korean-Japanese consortium of three companies won the contract to build and operate the 1 Bcf/d terminal (see Daily GPI, March 11). Construction began last July.

TransCanada owns and operates the 130-kilometer (81-mile) Tamazunchale Pipeline in central Mexico. In the 1990s TransCanada built the 700-kilometer (435-mile) Mayakan Pipeline and the 214-kilometer (133-mile) El Bajio pipelines. Those pipelines, later sold, were the first non-Pemex pipelines in Mexico.

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